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For Microsoft Office, it’s Uphill All the Way to the Cloud

By

Steve Nellis

May 11, 2015
10:00 AM PDT

Microsoft is hoping to do something that, to date, Oracle, SAP and IBM have each failed to do: transition its customer base to cloud-based subscription services without sacrificing profits. Just how tough that challenge is for the software giant is increasingly clear.

The company has set itself the goal of boosting its “commercial cloud” annual revenue to a run rate of $20 billion by mid-2017 from $6.3 billion now, in hopes of at least partly offsetting an expected erosion in its roughly $49.5 billion in revenue coming from selling Office and Windows to businesses last year.

“The fact they’re providing ways to get Office-like capabilities for free and across devices is due to customer feedback, but that feedback is also telling them where they can make money and how they can ask for it.”

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